FOREX-Euro rises to $1.18, bolstered by ZEW sentiment survey

* German ZEW economic survey pushes euro up amid thin
liquidity
* Fiscal stalemate, US-Sino tensions breathe strength into
dollar
* Oil currencies flourish as oil prices rise
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

(Updates prices)
By Olga Cotaga
LONDON, Aug 11 (Reuters) - The euro inched higher on Tuesday
after investor sentiment in Germany improved more than expected
in August.
The ZEW survey of economic sentiment rose to 71.5 from 59.3
points the previous month, far exceeding a forecast for 58.0 in
a Reuters poll of economists. As a result, euro/dollar gained 0.5% to $1.1809 EUR=EBS .
The move was exacerbated by thin August liquidity, though, said
Jane Foley, senior currency analyst at Rabobank, and she was
"suspicious" about how much effect the ZEW survey had.
"We need to wait till September to see clear direction
coming from euro/dollar," Foley said.
The euro had been bolstered recently by views that the
continent was handling the coronavirus-induced economic slowdown
much better than the United States.
In early European trading, the U.S. dollar maintained its
gains, amid U.S.-China tensions and a stalemate in the U.S.
Congress over fiscal stimulus. But fresh data showing that the
rest of the world was outperforming the United States quickly
removed those gains.
The dollar earlier at $1.1722, its strongest since Aug. 4.
Before that, the dollar had been declining for seven straight
weeks.
The dollar was last up 0.1% against the Japanese yen at
106.09 JPY=EBS as U.S. 10-year Treasury yields rose to
two-week highs US10YT=RR before a quarterly U.S. refunding
auction on Tuesday.
Congressional leaders and Trump administration officials
said on Monday they were ready to resume negotiations on a
coronavirus aid deal. It was unclear whether they could bridge
their differences. Meanwhile, China imposed sanctions on 11 U.S. citizens,
including Republican lawmakers, following Washington's sanctions
on Hong Kong and Chinese officials. And U.S. Treasury Secretary Steven Mnuchin said companies
from China and other countries that do not comply with
accounting standards will be delisted from U.S. stock exchanges
as of the end of 2021. Market response to the U.S.-China conflict has been limited,
but analysts say there could be longer-term implications.
"The market remains in the expectation that everything will
turn out for the best in the dispute," Commerzbank currency
analyst Antje Praefcke said. But "an agreement has probably
already been priced in accordingly, which means that the dollar
has hardly any more upside potential."
"The euro does not really have that much to offer these
days, either ... The bottom line is that with $1.19 we probably
have seen the highs in euro/dollar for the time being, but at
the same time there are no good reasons for levels below $1.16,"
Praefcke said.
Elsewhere, the Turkish lira stayed near Friday's record low
on concerns about the country's dwindling foreign-exchange
reserves, leading to expectations the central bank will take
more decisive action to stem its fall.
The lira was quoted at 7.2362 per dollar TRYTOM=D3 , just
above Friday's record low of 7.3650.
The Norwegian crown, on the other hand, has flourished as
oil prices rose, becoming the best performer so far this week
alongside the Canadian dollar and the Russian rouble, according
to MUFG analysts.
The crown was last up 1% at 8.9485 to the dollar NOK=D3 ,
boosted by Monday's central bank report that showed Norges Bank
was one of the least dovish G10 central banks.
The Canadian dollar rose 0.5% to $1.3284 CAD=D3 .
Sterling traded at $1.3121 GBP=D3 , up 0.4% on the day,
after Bank of England Deputy Governor Dave Ramsden said in an
interview published on Tuesday the central bank will step up
quantitative easing if the British economy struggles again.
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